Cannabis Law Prof Blog

Editor: Franklin G. Snyder
Texas A&M University
School of Law

Monday, November 19, 2018

Greenwood v. Green Leaf Lab LLC suggests federal protections apply to cannabis employees

Fail-Labor-Standards-Act-FLSA

A marijuana testing facility recently argued that the federal ban on marijuana allowed the company to escape obligations under the Fair Labor Standards Act (FLSA).  In Greenwood v. Green Leaf Lab LLC (Greenwood) the District Court of Oregon did not agree and cited the protective purpose of the FLSA due to the absence of on-point precedent. The District Court of Oregon in Portland (District Court) found that the FLSA did apply to employees in state-legal marijuana companies.

Greenwood was brought to court by a courier who transported marijuana samples for the defendant (Plaintiff). The defendant operates a marijuana testing facility in Portland (Defendant). Defendant classified Plaintiff as an independent contractor, despite controlling all aspects of his work. Plaintiff complained that due to his employee misclassification, he made significantly less than minimum wage. Plaintiff questioned his status as an independent contractor, and Defendent started to pay him an hourly wage. Plaintiff was fired a month later, and Defendant gave no explanation except that the business was "going in another direction."

Plaintiff brought Defendant to court, claiming Defendant violated provisions of the FLSA and Oregon wage and hour statutes. Defendant moved to dismiss the FLSA claims because it believed the claims were barred by the federal Controlled Substances Act (CSA). The District Court corrected the motion as a motion for failure to state a claim under FRCP 12(b)(6). 

Defendant essentially argued that Plaintiff could not "invoke the power of a federal statute to enforce an alleged employment relationship that was based entirely on an occupation that is federally illegal." Plaintiff responded that marijuana's legality was not relevant to his claims under the FLSA because the two did not inherently conflict. 

The District Court recited that “Dismissal is proper when the complaint does not make out a cognizable legal theory or does not allege sufficient facts to support a cognizable legal theory.” The District court also recognized that, "As to the specific issue raised here, the parties have not cited, and I have not found, any judicial decision addressing whether the FLSA covers employees working for state-sanctioned medical marijuana businesses."

Because the District Court had no precedent to rely on statutory interpretation of the FLSA guided its decision:

In resolving this issue of statutory interpretation I start with the premise that the FLSA is a remedial statute “to be construed liberally in favor of employees; exemptions are narrowly construed against employers." Haro v. City of Los Angeles, 745 F.3d 1249, 1256 (9th Cir. 2014). "The FLSA requires that employers comply with minimum labor standards to promote “the health, efficiency, and general well-being of workers." 29 U.S.C. § 202(a).

The District Court concluded that, due to the remedial nature of the FLSA, any possible violations of the CSA should not bar state-legal marijuana company employees from protection. The District Court reasoned that it was not comfortable "categorically excluding" workers in the medical marijuana industry when there is no express exclusion in the FLSA. 

Further, the court found a legal advice memorandum written for the National Labor Relations Board (Wellness Memo) persuasive. The Wellness Memo concluded that the National Labor Relations Board had jurisdiction over labor disputes in the medical marijuana business despite federal illegality. In relevant part the wellness memo provides:

[I]t is appropriate for the Board to assert jurisdiction here even though the Employer's enterprise violates federal laws. DOJ . . .  has indicated that it will not prosecute medical marijuana companies such as the Employer . . . This federal policy. . . creates a situation in which the medical marijuana industry is . . .  employing thousands of people, some of whom are represented by labor unions . . . despite the industry's illegality. Moreover, another federal agency, OSHA, has exercised jurisdiction over employers in the medical marijuana industry, including the Employer, notwithstanding that such enterprises violate federal law. . . . Just because the Employer is violating one federal law, does not give it licence to violate another.

The court echoed the statement that an employer violating a law should not have a licence to violate another. It further cited the Ogden Memorandum "authorizing the medical use of marijuana" as evidence that the federal government was moving toward tolerance and that the CSA and FLSA did not inherently conflict.

Ultimately, the District Court denied Defendants motion to dismiss on these grounds. It did not make any decisions about the merits of Plaintiffs FLSA claims, and the case was eventually settled. 

Greenwood is a victory for employees in the legal marijuana industry because it suggests the federal government is not going to be completely hands-off in the marijuana industry and may offer other protections over time. The Greenwood decision has already been cited in two other district court decisions (Kenney v. Helix TCS, Inc, and Tarr v. USF Reddaway, Inc.), which suggests its holding will continue to be applied. The cases that cited the opinion were in Oregon and Colorado, so we will have to wait to see if other districts continue to apply the Greenwood court's ruling. 

--Kylee Debler

    November 19, 2018 | Permalink | Comments (0)

    Thursday, November 1, 2018

    OPINION: Marijuana Legalization Could Curb Opioid Abuse

    AaaSince 2000, over 500,000 Americans have died from opioid overdoses--equating to more American lives lost from this epidemic than World War II.

    According to the CDC, opioids are currently the most common cause of accidental death in the United States. With this drug taking so many American lives every day, measures need to be taken to lessen opioid use. Experts have proposed that medical marijuana may be a solution to help Americans struggling with opioid addiction.

    In a recent student conducted by the journal JAMA Internal Medicine, researchers found that states with legalized medical marijuana (MMJ) report 2.21 million fewer daily doses of opioids prescribed per year under Medicare Part D, compared with those states without MMJ. Opioid prescriptions under Medicaid also dropped by 5.88% in states with medical cannabis laws compared with states without such laws, according to the studies.

    David Bradford, professor of public administration and policy at the University of Georgia and a lead author of the JAMA study, notes the study's significant findings.

    "We found that there was about a 14.5% reduction in any opiate use when dispensaries were turned on -- and that was statistically significant -- and about a 7% reduction in any opiate use when home cultivation only was turned on," Bradford said. "So dispensaries are much more powerful in terms of shifting people away from the use of opiates.

    Further, the recent JAMA study is not the first set of research indicating a link between marijuana legalization and decreased opioid use. Another JAMA conducted study from 2014 revealed that states with MMJ had 24.8% fewer opioid overdose deaths between 1999 and 2010. And perhaps even more convincing evidence was set forth in a 2017 study published by the American Public Health Association, which found that the legalization of recreational marijuana in Colorado in 2012 reversed the state's upward trend in opioid-related deaths.

    Even with the evidence provide by numerous studies and epidemiologic research, medical marijuana still has its skeptics, such as Attorney General Jeff Sessions, who recently commented, "we think a lot of this [opioid use] is starting with marijuana and other drugs." 

    If marijuana were actually a dangerous gateway drug, as Sessions suggested, it would be at least somewhat evident across the data gathered. We would find that states with MMJ laws have an increase of opiate drug use and overdose deaths, when in fact just the opposite has been evidenced. 

    Despite the relatively minimal side-effects associated with marijuana use, such as cognitive impairment, these risks are nearly obsolete when compared to the often-deadly impact resulting from opioid abuse.

    Again according to Bradford, unlike opioids, marijuana has little addiction potential.

    "No one has ever died of cannabis, so it has many safety advantages over opiates," Bradford said. "And to the extent that we're trying to manage the opiate crisis, cannabis is a potential tool."
    If we as a nation want to successfully remedy the current opioid crisis, this type of comparative research needs to continue--and federal regulations needs to adapt accordingly. Senselessly ignoring medical marijuana as an alternative pain treatment to opioids will continue to be a detriment to the public health and welfare of America's citizens. 
     
    --Gabrielle Rennie

    November 1, 2018 in Drug Policy, Medical Marijuana, Research | Permalink | Comments (1)

    Crossing the Canada–United States Border: Business Travelers Might Need Training on What Not to Say

    AaaBusiness travelers crossing the Canada–United States border should be mindful of what they say to immigration authorities. Canada legalized recreational marijuana use and cultivation this month.

    Under the Cannabis Act, adults are allowed to possess, carry and share with other adults up to 30 grams of dried cannabis. They will also be permitted a maximum of four homegrown marijuana plants per household in most provinces. However, the substance is still illegal under federal law in the United States. If an immigration authority suspects someone at the border of illegal activity, which includes possession of marijuana in the United States, the authority may stop the person and refuse entry.

    Stefanie Di Francesco, a Canadian employment attorney at McMillan LLP, reports that companies that require employees to regularly cross United States-Canada border would benefit from specific training for those employees regarding how to handle port of entry questioning with immigration authorities.

    Both Canadian and American immigration authorities at the ports of entry , she notes, must assess whether a traveler is admissible for entry, which includes assessing whether a traveller is criminally inadmissible. According to Di Francesco:

    “Generally, a traveller is considered to be criminally inadmissible to Canada if the person was convicted of an offence in Canada, or was convicted of an offense outside of Canada that is considered a crime in Canada, or committed an act outside of Canada that is considered a crime in the country where it occurred and would be punishable under Canadian law.

    A traveller is considered to be criminally inadmissible to the United States if the person violated any law or regulation of any state, the federal government, or a foreign country relating to a controlled substance, which includes cannabis and cannabis related products. As in Canada, an actual conviction for a crime is not required for a traveller to be found inadmissible. Admitting to the essential elements of an American crime will render a person criminally inadmissible to the United States even if that conduct is legal in Canada.”

    As with any law enforcement matter, a traveler’s experience may vary depending on the officer. It should be noted that immigration authorities employed by the United States government are required to enforce federal law, especially with respect to illegal drugs. However, according to Di Francesco, “[U]nless there is directive from the federal government, travelers’ experiences may vary significantly depending on the particular officer responsible for reviewing their status at the port of entry.” In the case of business travelers, it is best not to take chances. Not only is a business traveler likely a valuable member of a company’s team, they also represent the company and affect the company's reputation even outside of normal work parameters. For this reason, it is advisable that such business travelers know how to handle any situation that could arise at the border due to new cannabis laws.

    For example, an immigration authority could simply ask, “Have you ever used marijuana either prior to or following its legalization in Canada?” Given the agent’s broad latitude for decision-making at the border, if the traveler answers yes, the admission could be used as a basis to determine that they are inadmissible. Not surprisingly, there are risks for those employed in Canada’s cannabis industry. Authorities can question a business traveler about the purpose of their proposed entry, their employer’s business, and whether the traveler has aided in the production or sale of cannabis as part of their employment. The answers given could be viewed by an officer as providing a basis for a finding of inadmissibility.

    Di Stefano advises employers whose businesses rely on cross border travel to draft clear employment policies to address requirements around cannabis use for employees who travel internationally on business; ensure employees are adequately prepared for port of entry questioning, which may include conducting training on best practices; and include contractual provisions in employment agreements concerning termination where international travel is required and the employee is found inadmissible to the United States (or another country).

    --Kindal Wetuski

    November 1, 2018 in International Regulation, Law Enforcement, Recreational Marijuana, Travel | Permalink | Comments (0)

    Q&A: Officer Jane Doe on Handling of Marijuana Possession

    AaaI recently interviewed police officer Jane Doe to get her take on how her police department and the greater Dallas County area handles illegal marijuana usage.  Officer Doe thought it would be easier to be candid if should could speak without attribution.

    Whether there are policies in place at the local level, whether there are “unwritten rules” on how to handle marijuana, if she has seen changes on how marijuana usage is handled throughout the years, her opinion on allocating police resources towards illegal marijuana usage, and her thoughts on the future of marijuana in the criminal sphere.  

    Jane Doe has been working for the department for several years. She started off as an emergency dispatcher and transitioned into becoming a police officer. Due to her roles in the police department, she had the opportunity to see how other police officers handled marijuana related cases, see any changes made on a wide-spread level, and has practiced those regulations as an officer herself.

    Q: Can you tell me a little about your background and what got you interested in becoming a police officer?

    A: I have always wanted to be a police officer. I grew up in Pleasant Grove [a neighborhood in Dallas, Texas; an area with one of the highest crime rates in the country and full of drug dealers]. I saw how often people would slip through the cracks or just were not given a fair chance as well as bad people who wanted to cause harm so I wanted to do something on a local level to help. Becoming a police officer was a method to help keep the streets safe from actual bad people but also help those that just made a mistake and need a kick in the right direction. Too often the police officers working in high crime rate areas do not understand the issues people face and have difficulty building a relationship with the community.

    Q: During your training to become a police officer was there any focus on dealing with marijuana users?

    A: Minimal, the training focused on the difference of driving under influence and driving while intoxicated. Substances would be more subjective tests – eyes, smell, speak, stuff like that. When dealing with marijuana, the officer has more discretion on whether fines, arrests, or sobriety tests are performed. Dallas County has more lenient rules for marijuana.

    Q: Was there anything different about your marijuana training compared to other crimes?

    A: Not really; we mostly follow the same procedures for all possibilities. There are some different levels of caution, calling-in, discretion, and other procedures but there was not anything that stuck out about dealing with possible marijuana possession.

    Q: Once on the job, did you find any differences in dealing with marijuana users compared to that in your training?

    A: Not really, no. Of course with experience and field work all things change for the better but the training was definitely a good and accurate starting point on how to handle such calls. However, I did come in contact with a lot more marijuana possession instances than I thought I would. It is definitely not segregated to a certain class or type people as a lot of sources might make it seem. The interactions are daily; about two out of every five traffic stops, I can smell or tell that the person or someone in the car has been using marijuana or has it on them. On highway stops, it increases to about 90% of them are marijuana users; again ranged in all type of people.

    Q: Do people caught with marijuana say anything or how do they address it?

    A: Scared and worried; ignorance of the legal process – they do not know that just because it looks like they have been smoking weed, it still needs to be proven. Their response really has a lot to do with how officers deal with the person.

    Q: How would you describe your interactions?

    A: More of a personal interaction – like a friend. They react a lot more relaxed and straight forward.

    Q: Any large differences on how other cops act with them, compared to yourself?

    A: New officers, less experienced officers, or those sheltered growing up are awkward about their role and often it does not go as smoothly. Also seen other officers who are great in interacting with people and communicating with general public – makes the people feel comfortable.

    Q: What happens when they admit to having MJ?

    A: If it is a usable amount then it is an arrest but I explain to people what is going to happen (class B misdemeanor). I try to be very helpful as far as let them call their moms or spouses, whatever they need to alert someone of what is about to happen.

    Q: From your experience on the job and from what you hear from other officers has the amount of marijuana users changed in the past few years?

    A: People are a lot more comfortable smoking out in public or in their cars or everywhere whereas before they were trying to hide. Depends a lot on the officer – a lot of officer discretion. I always find myself asking why I should arrest someone over such a small amount when I could be arresting someone on meth or committing a violent crime.

    Q: Has legalization of adult use of marijuana in other states had any impact in Texas?

    A: Feel like Texas is doing its own thing regardless of other states; don’t see it changing anytime soon.

    Q: Has legalization of adult use of marijuana in other states impacted how people defend their marijuana use?

    A: Absolutely, for people, a lot of people do not know the laws so for example people order stuff online and don’t know it is a felony. Higher charge than a bag of weed. THC pens and gummies and all sorts of things. The FedEx security unit calls the cops if they see anything or smell anything regarding marijuana usage. We do not arrest the buyer or seller, the item is just put under a “found property report” and then people call in, mad that their item never arrived. We only arrest if the item is found on the person.

    Q: Have there been any changes in orders from the chief of police on how to deal with marijuana users?

    A: No, there has been no comment on it from chief of police. Our department is a lot smaller however so maybe the chief for Dallas has said something about it.

    Q: Compared to other drug related offenses, how prevalent is marijuana?

    A: Marijuana comes across a lot more often but partly because of smell but it is just as much of an issue as other substances. People under the influence of marijuana are a lot more relaxed and chill, easier to explain, easier to deal with because of nature of substance. Cocaine, alcohol, and crack and other substances make them a lot harder to handle because of nature of the substance. There is also the chance that whatever they used might be mixed with something else.

    Q: For other substances, is there also officer discretion?

    A: Yes, different because it is a lot easier to test, bigger charge, marijuana alone is its own safety code under the Health and Safety Code - a definite arrest.

    Q: Do you come across a large amount of dealers?

    A: No, “big time” dealers just some dude with scales and wad of money. They vary from nerdy looking kid to guy who resisted and fought officers. It’s a never know.

    Q: Do you see any changes coming to how your department or police departments in general handle marijuana related crimes in the next five to ten years?

    A: Probably not; I think things stay about the same in Texas. No drastic changes coming anytime soon.

     --Fernando Lira Gomez

    November 1, 2018 in Drug Policy, Law Enforcement, Local Regulation, Recreational Marijuana | Permalink | Comments (0)

    Wednesday, October 31, 2018

    Marijuana legalization likely to create market for low-THC products aimed at new users

    20140508__MarijuanaBanking1Most people view marijuana legalization as a floodgates moment where long-time black-market marijuana users can finally go to the corner
    store to buy ultra-potent strains of the drug in large quantities, and spend their free time testing the hypothesis that it is impossible to overdose on marijuana.

    This may be true, but according to a recent report by Deloitte, widespread marijuana legalization may also create a large market of first-time users trying legal marijuana products out of curiosity. According to the report, these consumers are expected to seek out a less potent, more socially acceptable method of ingesting the substance. Forbes.com has the story:

    It seems the American CBD craze has invaded Canada. Now, more of those customers, presumably the ones with less experience with hard-hitting pot like GG#4, or these things called dabs are requesting products heavy in the non-intoxicating compound of the cannabis plant. These people are the focus of the latest market report that suggests new, legal users (typically older folks) are more intrigued these days by the stress relieving powers of the plant than they are in getting wrecked.

     

    "CBD is becoming kind of an 'it' word in cannabis. We see a real trend there," Andrew Pollock, vice-president of marketing for The Green Organic Dutchman, told CBC News.

     

    Due to the forecasted demand for low-THC pot products, dispensaries may want to consider advising customers on the advantages of micro-dosing. Some are already making this part of the plan. After all, this low-key method for consuming cannabis, which is geared toward the person wanting to maintain a functional high without drooling all over themselves and dreaming of tacos all day, is already catching on in parts of the United States.

     

    "(They say) two milligrams or three milligrams just has a mild relaxing effect and doesn't interfere with you going about your day," said Tom Adams, managing director of BDS Analytics in Colorado.

     

    It's not totally surprising that this new consumer segment seems to be emerging. After all, the purpose of legalization is to make marijuana safer through regulation, and more accessible to the public. The Deloitte report describes current black-market marijuana users as young "risk takers" indicating that their use of marijuana is driven by a desire to "live life to the fullest", and that its illegal status does not curb that desire–if anything it amplifies it.

    However, the report goes on to project that the marijuana consumer of the future will be more interested in a less frequent, more relaxing or therapeutic marijuana experience. In other words, once the drug is legalized it will no longer be a ritualistic and taboo exercise in hedonism, but instead will become more akin to the occasional glass of wine or scotch. Further, the report projects that marijuana users in the future will be willing to pay a premium for their products, and will place a high value on knowledgeable staff and diverse product selection. These insights further the parallel between marijuana and alcohol, as recent years have seen a growing demand for high-quality craft beers and locally distilled liquors sold by knowledgeable bartenders and similar connoisseurs.

    Government regulators are sure to be happy to hear this information, as there have historically been some concerns that marijuana legalization would result in increased habitual drug use, leading to a host of other societal problems. At least for now, it sounds like cannabis consumers of the future will approach the drug with caution and treat it as an occasional indulgence, rather than instantly succumbing to the "Reefer Madness" that many used to fear.

     –John Robinson

    October 31, 2018 in Business, Drug Policy, Edibles, Federal Regulation, International Regulation, Medical Marijuana, News, Recreational Marijuana, State Regulation, Voter Initiatives | Permalink | Comments (1)

    Q&A: The "Dopest" Lawyer in Town (Part 2 of 2)

    This is a continuation of Q&A: The "Dopest" Lawyer in Town (Part 1 of 2).  

    Every U.S. state that shares a border with Texas has passed legislation to legalize medical marijuana -- so what does that mean for the Lone Star State?

    I recently had a chance to talk to one of the lawyers on the front lines of that issue, Daniel Mehler, of Dallas's Roper & Mehler. Here, the self-proclaimed "dopest lawyer in town" talks about his front-row seat to what's happening.

    It is no secret that "canna-cations" (tourism for legal cannabis use) have become more popular as its become easier to access legal cannabis in other states. Pair the travel trend with the huge black market in Texas and it’s safe to say that a lot of employees have cannabis in their system. Mehler shared some information on the relationship between marijuana and employment law.

    AG: Are you aware of any trends that Texas employers are creating to manage potential risks posed by employees obtaining and using “legal” pot out of state?

    DM: As far as Texas-based companies, I haven't really seen any change. We have seen a change on the national level. A lot of national companies have started to exempt marijuana smoking from their pre-employment drug testing. In Colorado, most employers don't drug test, but the issue has been litigated and determined that employers can punish you up to and including dismissing you from employment for legal use, off the clock, of medical cannabis, never mind recreational cannabis. So it has become an employment minefield. You also see things like for car salesmen, because of insurance requirements, employers, even though it's legal, not allowing [off the clock use] at all. On the flip side of it, getting away from just the domestic market, Vancouver, British Columbia just announced that it's police officers will be allowed to smoke legal, Canadian cannabis once their market is live beginning October 17th, as long as they're off duty.

    AG: It just seems like it's going to be so hard to police for the out of office conduct stuff because of the drug testing issues. How can an employer tell if someone engaged on vacation or right before their shift?

    DM: No, that's just it, in Colorado, it doesn't matter. The employer can just fire you regardless of where it actually occurred. You don't actually have a right to consume cannabis, even though it is legal in the state.

    Moving into family law, Mehler pointed out a few points of contention that will continue to grow as more people begin to access and use marijuana both medically and recreationally.

    AG: Are you aware of any effect either the compassionate use act or the legalization of marijuana in nearby states on family law matters in Texas?

    DM: Google Christy and Mark Zartler. They have a profoundly disabled daughter named Kira. She has autism and is extremely self-injurious. They started administering cannabis smoke and discovered that it relieved all of herself injurious symptoms. CPS tried to intervene. It went to court and this past year a Judge ruled that the State would not take custody of their daughter; that nothing that they had done was dangerous to their daughter. So, they actually beat CPS in court, despite having published a YouTube video that got several million views of them administering cannabis to their daughter. So yeah, the impact is there. You see that CPS removes children when parents consume cannabis, but then we've also seen a highly publicized case where a judge, an impartial arbiter, says no, no, no, CPS was out of line on this. So, we’ll see how that plays out as we go forward. Another problem with family laws circles back to the THC concentrate problem, where those people are getting charged with felonies [rather than simple possession]. As more time passes, you're going to see more of their kids in CPS investigations.

    AG: What about in divorce or child custody matters? Are parents able to use examples of the other using cannabis in a legal state against one another?

    DM: Absolutely. We see it all the time. I have buddies that do divorces, and obviously, some of our criminal defendant clients also have marital issues. We see “drug use” arise in those matters all the time, even if it's strictly cannabis. Parties take and use those facts as a hammer and just club each other with it.

    Last, we moved in to talk more about Mehler’s other practice area. I was interested to know about the presence of and risks to Texans in out-of-state, legal cannabis business.

    AG: Have you seen any changes in business law in Texas in response to marijuana legalization in the surrounding states?

    DM: In Texas, we don't have a lot of business law on it because there's not new jurisprudence and, obviously, you can't contract to do things that are illegal. Originally in Colorado, there was no contract enforcement. Everything was basically done with handshake deals–an understanding that all of this is illegal and there was no contract enforcement because it's all in violation of federal law.  It took an act of the Colorado state legislature; they revised the statutes and specifically made cannabis contracts enforceable in state court. This built the foundation for the business to flourish because without contractual security it's very tough to draw in investors. Everybody wants security and defined rules. Eliminating the risks and making contracts enforceable in state court allowed the cannabis business very much to flourish in Colorado as a result.

    AG: Should Texas residents seeking to invest in or open a cannabis business across state lines (but do not carry the product into Texas) be aware of any potential punishment in Texas for trafficking, money laundering, conspiracy, etc.?

    DM: I don't think there are any problems with it at this point. We assist clients in moving money around the country in the legal markets and in trying to find the proper vehicles to do so. There is, theoretically, federal exposure to conspiracy charges, but I don't think it will become a problem as long as the cannabis is being produced and distributed in compliance with state laws where it's legal and no products are crossing state lines. I've never had any clients implicated in any sort of conspiracy like that. It doesn't happen from a functional standpoint. The feds have been up in the panhandle since the cannabis industry picked up and have started prosecuting cannabis being transferred across borders into Texas. The northern district hadn’t prosecuted this stuff for the previous 20 years. All of the charges went into state court. Now they (the feds) have decided to make that a priority. But, as far as legit business people just moving their funds in the legit markets, there's effectively no barriers at this point. The biggest investors from DFW to have money in California, Oregon, Washington, and Colorado at this point. 

    AG: That’s interesting. This is sort of an inexperienced question, but how do these prosecutions end up in federal court? Aren’t these people being stopped by local police officers?

    DM: So, generally it is your local police stopping and making an arrest. Unless it starts with a DEA investigation. That's one way, you know, the DEA does its own investigation. But in most of these, loads the weigh 30, 50, 100, 250 pounds, whatever it may be, it’s that the local police have busted some courier moving it around, and the arrest triggers a federal investigator. Usually, it’s a local cop that makes the stop and the arrest and then DEA will pick it up and then the U.S. Attorney will then prosecute it in federal courts plan. Generally, after that happens, State charges will get dropped. They’re not going to spend their time pursuing you once you land in the federal pen.

    AG: So it's just a handover process. It's not like there are FBI or DEA agents driving around pulling people over…

    DM: No. No. You never see that. You absolutely will never see a federal agent conducting a traffic stop. They form drug task forces and work with local law enforcement. So you'll see like a DEA agent and two sheriff's deputies working together as federally funded task forces. If the DEA wants to stop a vehicle, that's how they'll do. They will put a call into local law enforcement to stop them.

    AG: Do you know of any other interesting or surprising effects that have happened in Texas or have any anecdotal stories to share?  

    DM: I can't really tell you the specific stories because I'll be trampling on my client confidentiality. But I will say, Texas has always been the most business-friendly place in the country–has always had a lot of people that are interested in making a lot of money– but the state of Texas doesn't want to move towards legalization. There's a lot of Texans’ money that's out there chasing [cannabis] profit and, frankly, I think it's kind of a shame that it's chasing it outside of the state of Texas. You know, a lot of Texan money is making a lot of tax revenue for a lot of other states. That's both in the black market [buying the “legal” stuff and bringing it to Texas] and the legal market [investment and tourism outside the state]. It's kind of ridiculous. And it’s just going to get easier the more concentrated marijuana businesses are surrounding Texas. Once it gets to be a two-hour drive rather than a 12-hour drive from DFW… let's just keep the money at home.  Look at what they did in Colorado the first year it was legalized. The first 40 million in tax revenue every year goes straight to the public schools capital campaign. So they are able to start building schools, giving teachers raises, doing all of this without raising anybody's taxes. If that's not the most Texas shit in the world, I don't know what is. The reality is, the people are smoking pot [in Texas] whether you’re taxing them or not.

    - Ashley Goldman

    October 31, 2018 in Business, Commercial Law, Medical Marijuana, Travel, Workplace | Permalink | Comments (0)

    ANALYSIS--Hemp Farming Act of 2018 (S. 2667)

    Senator Mitch McConnell (R-KY) introduced S.2667, the Hemp Farming Act of 2018, in the Senate on April 12, 2018. The bill's general purpose is stated as "A bill to amend the Agricultural Marketing Act of 1946 to provide for State and Tribal regulation of hemp production, and for other purposes." Hemp Farming Act of 2018

    S. 2667 aims to make hemp an ordinary agriculture commodity by removing it from Schedule I of the United States Controlled Substances Act (CSA). The bill defines hemp as "the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis." The CSA describes a Schedule I drug as a drug that has a high potential for abuse and has no current accepted medical use in treatment.

    Under S. 2667, if a State or Indian tribe wants to have "primary regulatory authority over the production of hemp" in their territory, then the State or Indian tribe must "submit to the Secretary, through the State department of agriculture...or the Tribal government...a plan under which the State or Indian tribe monitors and regulates the production" of hemp as described in the bill. The State or Indian tribe's plan must provide the following:

    (i)  a practice to maintain relevant information regarding land on which hemp is produced in the State or territory of the Indian tribe, including a legal description of the land, for a period of not less than 3 calendar years;

    (ii)  a procedure for testing, using post-decarboxylation or other similarly reliable methods, delta-9 tetrahydrocannabinol concentration levels of hemp produced in the State or territory of the Indian tribe;

    (iii)  a procedure for the effective disposal of products that are produced in violation of this subtitle; and

    (iv)  a procedure to comply with the enforcement procedures under subsection (d)...

    After a plan is submitted by a State or Indian tribe, the Secretary must approve or disapprove of the plan within 60 days. However, if the plan is disapproved because it does not comply with the requirements stated above, the plan can be amended and resubmitted.

    A hemp producer can negligently violates their plan by:

    (i) failing to provide a legal description of land on which the producer produces hemp;

    (ii)  failing to obtain a license or other required authorization from the State department of agriculture or Tribal government, as applicable; or

    (iii)  producing Cannabis sativa L. with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent on a dry weight basis[,]

    If a hemp producer does violate their plan, then the hemp producer must correct the negligent violation by a reasonable date, and they will be required to "periodically report to the State department of agriculture or Tribal government...on the compliance of the hemp producer with the State or Tribal plan for a period of not less than the next 2 calendar years." The bill provides that if a hemp producer negligently violates their plan they cannot "be subject to any criminal or civil enforcement action by the Federal Government or any State government, Tribal government, or local government other than the enforcement action" stated above. But, a hemp producer that violates their plan three times within a 5-year period will become ineligible to produce hemp for five years following their third violation. The bill also provides that a hemp producer that violates the State or Indian tribe plan with a culpable mental state shall be reported to the Attorney General and the chief law enforcement officer of the State.

    Additionally, S. 2667 aims to amend the Federal Crop Insurance Act to make hemp insurable, and the bill proposes other amendments to legitimize hemp research and its funding.

    The Atlantic reports that it is "legal to sell products made from hemp in the United States, but the market is currently filled almost entirely by imports from other countries" such as Canada and China. So with the passage of S. 2667, United States farmers could reduce the amount of hemp being imported. The article also states that farmers struggling to make a profit on tobacco may be able to make up some of their losses with the legalization of hemp.

    Unlike many of the new marijuana related bills that have a small chance of being enacted, S. 2667 is expected to have a moderate chance of becoming law.

    --Wyatt Hinson

     

     

     

    October 31, 2018 in Business, Decriminalization, Legislation, Research | Permalink | Comments (0)

    Proposition 2 The Utah Medical Cannabis Act

    AaaUtah voters will decide the fate of The Utah Medical Cannabis Act, or Proposition 2, in the upcoming ballot on November 6, 2018. If passed, Proposition 2 would legalize medical marijuana for individuals with qualifying conditions under a strict state regulatory scheme and would authorize the establishment of private facilities to grow, cultivate, and sell medical marijuana.

    If approved by voters, Utah would become the 32nd state to legalize medical marijuana with the addition of Washington D.C.  Proposition 2 can be read in its entirety here.

    Proposition 2 Overview

    • Proposition 2 aims to legalize medical marijuana for individuals with qualifying conditions such as AIDs, alzheimer’s, cancer, crohn’s disease, epilepsy, multiple sclerosis, PTSD, autism, any rare disease that affecting less than 200,000 people throughout the U.S., chronic or debilitating pain, or any other condition evaluated on a case by case basis.
    • Individuals with qualifying conditions would receive a medical marijuana card from the Utah Department of Health with the recommendation of the individual’s physician.
    • The initiative would create a Compassionate Use Board responsible for reviewing and recommending approval for an individual who is not otherwise qualified to receive a medical marijuana card to receive a medical marijuana card for compassionate use.
    • Medical marijuana cardholders would be allowed to purchase either 2 ounces of unprocessed marijuana or an amount of marijuana product with no more than 10 grams of THC or cannabidiol during a 14 day period.
    • After January 1, 2021, individuals with medical cards would be allowed to grow six marijuana plants for personal use within their homes if there are no dispensaries within 100 miles.
    • Medical marijuana cardholder would not be allowed to smoke marijuana or use marijuana in public view except in a medical emergency.
    • The initiative would allow for the licensing of up to 15 marijuana cultivation facilities and would restrict the number of dispensaries by the number of residents in a county.
    • Proposition 2 would create 4 different types of private cannabis related facilities:
      1. Cultivation facilities- which grow marijuana to sell to other marijuana facilities;
      2. Processing facilities- which acquire unprocessed marijuana from cultivation facilities, process it into marijuana products, and sell those products to dispensaries;
      3. Testing facilities- which test samples of all marijuana and marijuana products to be sold by dispensaries; and
      4. Dispensaries- which sell marijuana and marijuana products to people who have been approved to use medical cannabis.

    Pros

    Proposition 2 will greatly expand the current Utah marijuana law that only allows marijuana to be grown, processed, or sold by the state of Utah to qualified research institutions or to people who are terminally ill. The initiative will both authorize the establishment of private facilities to cultivate and sell marijuana and it will greatly expand the group of people who are eligible to use medical marijuana.

    The initiative also recognizes the drawbacks of the strict state regulatory scheme by allowing medical marijuana cardholders the opportunity to grow their own marijuana plants within their homes if the individual is not within 100 miles of a dispensary. Proposition 2 restricts the number of dispensaries by the number of residents in a county divided by 150,000 and rounded up to the greatest whole number. Given the geography of Utah and it's sparse population in its mountainous regions, medical marijuana cardholders in those areas potentially would be left without a way to get medical marijuana. With this addition to Proposition 2, medical marijuana will reach a greater number of people who need it, regardless of where the individual cardholder lives.

    Additionally, Proposition 2 is expected to be profitable for the state of Utah. The Utah Office of Management and Budget estimate that Proposition 2 will pay for itself and would result in $2.1 million estimated revenue per year. Although Proposition 2 exempts medical marijuana from state and local sales tax, the initiative requires marijuana facilities to pay for licensing and registration fees. The Utah Office of Management and Budget estimate that:

    In the first year, Proposition 2 may cost the state $3.6 million, an amount that includes one-time setup costs. Some of the first year’s initial setup costs will have to be paid before the state begins collecting fees, requiring the state to pay $1.3 million from state tax revenue. After the first year, the annual revenue from fees is expected to cover the Proposition’s estimated annual cost of $2.1 million.

    Cons

    Proposition 2 is silent with regard to how the legalization of medical marijuana will impact employers and employees. Current Utah law allows employers to require employees and applicants to submit to drug testing as a condition of employment as well as for investigative purposes. The exclusion of language in Proposition 2 concerning employee drug testing will likely be problematic for medical marijuana cardholders.

    Proposition 2 is also silent as to the effect legalizing medical marijuana will have on drivers in Utah. Specifically, the initiative is silent regarding the treatment of medical marijuana cardholders who are legally entitled to use marijuana and who operate motor vehicles under the influence. Proposition 2 allows medical marijuana cardholders an affirmative defense (meaning it would negate any criminal charges) in criminal cases if:

    (a) if an individual is charged with illegally using, possessing, or manufacturing marijuana or marijuana products if the individual would be eligible for a medical marijuana card; or

    (b) if the individual has a medical marijuana card from another state and has a qualifying condition under this measure

    However, the initiative is silent as to the treatment of driver's found to be under the influence. Utah's definition of a "controlled substance" includes any substance listed as a Schedule 1 drug under federal law, which currently includes marijuana, therby making driving under the influence of marijuana illegal.  The exclusion of language in Proposition 2 concerning driving under the influence will likely be problematic for medical marijuana cardholders.

    The Takeaway

    With November 6th quickly approaching, Proposition 2 will head to the voting booth and Utah voters will be given the option to legalize medical marijuana for individuals with qualifying conditions under a strict state regulation scheme and authorize the establishment of private facilities to grow, cultivate, and sell medical marijuana throughout Utah. The latest polling on Proposition 2 shows a tight race with 51% of voters supporting the initiative, 46% of voters opposing, and 3% of voters who are undecided, according to the Salt Lake Tribune

    --Colin Heinrich

    October 31, 2018 | Permalink | Comments (0)

    Tuesday, October 30, 2018

    Q&A: The "Dopest" Lawyer in Town (Part 1 of 2)

    Every U.S. state that shares a border with Texas has passed legislation to legalize medical marijuana -- so what does that mean for the Lone Star State?

    I recently had a chance to talk to one of the lawyers on the front lines of that issue, Daniel Mehler, of Dallas's Roper & Mehler. Mehler, a former Coloradan, decided to become a lawyer when Colorado began moving towards legalizing medical marijuana. He planned to help companies start up in the industry. At graduation, Mehler found that the Colorado legal market had plenty of big names focusing on marijuana. So, not wanting to work long hours for little pay with one of those law offices, he moved to Texas, a business-friendly state, and here he waits, gaining cannabis expertise, ready for the day that Texas jumps on to the legal marijuana train trudging through the country.

    Here, the self-proclaimed "dopest lawyer in town" talks about his front-row seat to what's happening.

    Ashley Goldman:  Have the numbers of citations and arrests for possession of marijuana increased as the bordering states have legalized medical marijuana?

    Daniel Mehler: I'll tell you, in the Panhandle, there's been an absolute explosion of felonies, penalty group two felonies, involving THC concentrates and edibles. Those have just rapidly multiplied. While down in Austin, and obviously you’ve seen it in Dallas, as well San Antonio and Houston, they've moved in the complete opposite direction with small cannabis offenses–decriminalization.  A Houston district attorney ran on a legalization platform and got elected. They don't even prosecute misdemeanor pot anymore.

    AG: So, it is more the state-border cities that are having problems?

    DM: You see it in West Texas. I wouldn't say they're having a problem. I think cannabis has always been there, there's just a massive flood of concentrates moving in through all of the [state] border towns. The border counties–those poor, rural districts–and those out in West Texas jump all over it as a profit center. They see an opportunity to arrest people for a felony and get them on several years of probation or to charge them a steep fine for an alternative offer, some $5,000–7000 for a pre-trial diversion program. And people are scared to go into the penitentiary. I'm sure you know from your class, but lots of people don’t realize that 4 to 400 grams is a second-degree felony, so all of a sudden, those gummy bears are really serious crimes.

    AG: So, Colorado’s legalization of recreational correlates to additional arrests here in Texas, versus other border states that require a medical card or other identification?

    DM: Absolutely. It'd be purely speculative, but I would say that with Oklahoma’s move into the medical marijuana space, the arrests will continue to rise. Oklahoma will have one of the most wide-open medical policies in the country, a very unregulated market. They've granted 1100 business licenses and I would expect that the amount of felonies in the DFW area is about skyrocket. I think that you're going to see massive federal prosecutors in the Metroplex. You know, they’re 45 minutes from the border. People will be able to buy that shit easily. I would expect that you'll see people that have been involved and moving cannabis into Texas relocating just across the border in Oklahoma and Oklahoma become a massive source whenever it's in the game.

    AG: You mentioned decriminalization of marijuana in most of the major urban areas in Texas. Do you think that with the other two border states’ [Oklahoma and Louisiana] medical markets opening up in the next few months that the decriminalization might shift a little and they may not be as lenient, especially in the DFW area?

    DM: No. I think everyone recognizes that with flower, nobody gives a shit in 2018. It’s become increasingly difficult to seat the jury anywhere in the state and actually convict people on simple pot charges. In December 2016, in a San Antonio, Bexar County court, we got the first low-THC cannabis jury instruction for a Texas case. We got a not guilty in about five minutes, and not because it was about low-THC cannabis, but the jury just didn’t care. We gave them a way to acquit and they did. So, I don't think we're going to see any shift.  Where the problem is, is that people don't realize that a cookie is a second-degree felony; that vape pen is a state jail felony. These aren’t simple possession charges. People don't understand that cannabis products are treated differently than cannabis flower.

    AG: Maybe you could explain that a little further, it is because the charge is based on the weight of the product?

    DM: When THC is separate from the flower, it’s a charge under a separate code section. It starts as a penalty group two controlled substance. So as a result, adulterant dilutants, that is, the cookie, the entire weight of the cookie, not just the cannabis, get weighed for the charge. The actual gummy bears become the entire weight, not just the amount of the THC. Where it's really bad actually is in the cannabis-infused drinks. That 12-ounce soda only has 30 milligrams of cannabinoids, but the person ends up getting charged for 12 ounces of THC concentrate–that gets you to 400+ grams, so a first-degree felony.

    AG: So that's definitely something that people who are wanting to risk it and bring it across the border need to keep in mind.

    DM: It's something they need to keep in mind, but let's not kid ourselves, I don’t how attuned you are to the black market in Dallas, but that’s the risk premium. That makes that $8 gram of shatter (aka wax, dabs) in Denver worth $50.00 on the street in Dallas.

    AG: So, there is a large black market for some of the other products, besides the flower?

    DM: There’s a massive black market. It would it be purely speculative, but I would say hundreds of millions of dollars just in DFW alone in the concentrate market. I mean you can get an ounce in Colorado recreationally for about $300, take it to Dallas, and sell it for $1,400 if you sell it as 28 individual grams. With that profit gradient, you’re never going to stop people from doing that. And the reality of it is, an ounce of concentrate is small and relatively easy to conceal.

    AG: Is Texas fighting a losing battle in trying to keep “legal” marijuana out?

    DM: Absolutely. The reality of it is, the cannabis is already here but the Texas money is going out of state. Unfortunately, it's going out of state for black market channels. Texas consumers statistically consume more weed than anybody else and that's not going to change. What we see is quality continues to increase. South Texas used to be dominated by imported Mexican brick schwag weed [i.e., low-quality marijuana usually dry and brown]; it effectively doesn't even exist anymore. As prices have plummeted in Colorado, you see commensurate price declines in Texas on the flower side. With the concentrates, because of the risk premium with the felony prosecution, those prices have really stayed pretty steady. But as prices of flower have plummeted to where you can buy it at $90.00 an ounce in Denver, where it used to be $350.00 an ounce for good flower in Dallas, you can now pay for airfare and go buy your own for that price. Now prices have plummeted and Texas is awash with California, Colorado, and Oregon grown cannabis.

    AG: What about DWI or DUI Charges? Are you seeing increased prosecution for individuals accused of driving high? Is there any difference based on region? 

    DM: There are pockets in the state with increased prosecutions, like up in Wise County. They seem to ask everybody that they arrest with marijuana coming down [Highway] 287 when the last time they smoked was. We're seeing a spike in prosecutions for DWI for marijuana.  The problem with DWI on marijuana is there's no science to back any of it up, whereas, there's actually validated science that alcohol impacts everybody the same way. Everybody will exhibit the same physical manifestations of intoxication at a given level of alcohol in their system. Marijuana doesn't work the same. A casual smoker, consuming the same amount of THC, will get a lot more intoxicated than an everyday smoker, smoking the exact same product. Also, when you get into measuring intoxication there is a problem in that physical manifestations are different based level of metabolites. The only thing we can test in the blood to get an actual [measurement of cannabinoids in someone’s system] are metabolites that are pharmacologically inactive. The science of THC shows that peak intoxication happens literally just minutes after your last hit if you're smoking it.

    AG: So, before it does get metabolized and stored in fat cells or whatever else?

    DM: Yeah. In Colorado, they have started studying the link between metabolites and impairment, for instance, a five nanogram per liter of blood per se limit. Well, the vast majority of your medical cannabis users in Colorado are already above that when they wake up in the morning before they even spark their first flame.

    AG: That seems like one of the major downfalls of trying to have any enforcement, but a really good opportunity for scientists to get in there and figure out a way to measure it.

    DM: The National Highway Transportation Safety Administration has already funded studies. You're seeing a move in that direction. They want to validate [the science] so they can prosecute. But then, there's actually a study that said marijuana smokers are less of a threat than alcohol users because marijuana smokers are actually cognizant of their impairment and take compensatory measures. As a result. Generally, stoners don't get emboldened by being stoned.

     Continued at [link to part 2]

    October 30, 2018 in Business, Edibles, Law Enforcement, Medical Marijuana, Recreational Marijuana, State Regulation | Permalink | Comments (0)

    Adult Use Marijuana Legalization Leads to Increased Auto Accidents?

    DrivinghighMarijuana is so much safer than alcohol . . . ... or is it?

    Despite the common argument presented by advocates of marijuana, the U.S. News & World Report recently published an article describing a study that outlined statistics of auto accidents in legal marijuana states versus their neighboring prohibition states. Researchers found an increase in auto accidents in states that have legalized recreational marijuana use:

    An analysis of insurance crash claims show that accidents are up by as much as 6 percent in in Colorado, Nevada, Oregon and Washington, compared to neighboring states where recreational marijuana is not legal. Another analysis of police accident reports in Colorado, Oregon and Washington saw a 5.2 percent spike in accidents in those states, again compared with neighboring states.

    As the 2018 midterm elections approach, and hot on the tail of Canada's marijuana market kickoff, author Claire Hansen warns that states considering marijuana legalization should consider the correlation between auto accidents and marijuana legalization. While Hansen acknowledges that there is no direct link between marijuana use and auto accidents, she seems to agree that the correlation is concerning, to say the least. 

    An analysis of insurance crash claims show that accidents are up by as much as 6 percent in Colorado, Nevada, Oregon and Washington, compared to neighboring states where recreational marijuana is not legal. Another analysis of police accident reports in Colorado, Oregon and Washington saw a 5.2 percent spike in accidents in those states, again compared with neighboring states.

    The studies were conducted by the Highway Safety and Highway Loss Data Institute and the National Highway Traffic Safety Administration. President of theHighway Safety and Highway Loss Data Institute, David Harkey, urges that allocation of tax revenues should account for the potential increase in auto accidents post marijuana legalization.

    "If you're considering this in your state, if you're a legislator, you need to pay attention to what may be on the horizon in terms of road safety," Harkey says.

    The studies highlight the challenge of measuring and enforcing marijuana impairment, Harkey says. Researchers controlled for differences in driver population, weather, unemployment and the mix of urban and rural roads. But while alcohol impairment is easily measured through a driver's blood alcohol concentration and limits are codified into law, there's no equivalent for marijuana use. And though alcohol impairment is generally prevalent at night, roadside survey work found drivers impaired by marijuana at all times of day. 

    All of the results point to a need for proactive intervention and awareness from both legislators and the public, Harkey says, adding that something else to consider is how the tax revenue from marijuana sales will be used. Given the studies' results, it's smart to allocate some of the funds to enforcement and intervention efforts, he says.

    As Republicans plan to push for medical marijuana reform after the midterm elections, an eye toward motor vehicle safety will likely benefit states that could soon be subjected to an influx of drivers under the influence of marijuana. 

     --Ashley Goldman

    October 30, 2018 in Commercial Law, Law Enforcement, News, Research | Permalink | Comments (0)

    RECENT CASES: Harvard’s First Medical Marijuana Dispensary Opens Amid Legal Controversy

    image from goo.glThe Commonwealth of Massachusetts legalized the sale of marijuana for medical use through Registered Marijuana Dispensaries ("RMDs") in 2012, and in May 2013, the Department of Public Health enacted regulations that authorized municipalities to regulate the medical use of marijuana.

    Cambridge’s Harvard Square saw its first medical marijuana dispensary open at the start of the year. Healthy Pharms, a registered nonprofit medical marijuana dispensary, opened for business but wasn’t entirely welcomed by its new neighbors. Some Cambridge residents and store owners believed the marijuana dispensary would have a negative effect on the neighborhood.

    Property owners in Harvard Square brought a lawsuit claiming they had been injured by the anticipated opening of the licensed marijuana dispensary. Crimson Galeria Ltd. P’ship v. Healthy Pharms, Inc., 2018 U.S. Dist. LEXIS 141689 (D. Mass. August 21, 2018). The property owners asserted RICO claims and sought declaratory and injunctive relief against the dispensary and other related parties for acting and conspiring to distribute marijuana in violation of the federal Controlled Substances Act.

    The plaintiffs also brought claims against Massachusetts state and local governments on the grounds that federal law preempts Massachusetts' regulatory regime implementing the legalization of medical marijuana dispensaries.

    Background

    The City of Cambridge issued Healthy Pharms a special permit to operate a dispensary. Another defendant owned the building and leased the property to Healthy Pharms. The individual defendants are officers or principals of several of the defendant entities, including the bank the dispensary uses.

    The plaintiffs allege that the prospect of a dispensary has diminished the market value of their properties because the odor of marijuana will disrupt commercial tenants and interfere with the neighboring owners' use and enjoyment of their property. Also, there’s a stigma associated with the sale of marijuana, they claimed.

    Judge’s Decision

    U.S. District Judge Allison D. Burroughs explained in her opinion that the plaintiffs' claims against the government defendants weren’t valid because, although the federal Controlled Substances Act criminalizes the possession and distribution of marijuana, the authority to enforce the law rests only with the U.S. Attorney General and the Department of Justice.

    Healthy Pharms asked the judge to dismiss all of the RICO counts because the plaintiffs didn’t really suffer an injury caused by the opening of the dispensary. There must be clear and definite damages to state an injury under RICO, the dispensary argued. The plaintiffs claimed injuries included: (1) the proposed dispensary might emit odors of marijuana that would interfere with use and enjoyment of their properties; (2) that banks and investors wouldn’t finance certain planned projects due to the anticipated dispensary; and (3) the stigma associated with marijuana and the fear of increased crime had already diminished the market value of their properties.

    The judge agreed with the dispensary, holding that the plaintiffs didn’t dispute that their damages theory relied on the public disclosure of the future possibility of a dispensary, and the plaintiffs hadn’t suffered actual damages.

    As far as the bank used by the dispensary, the plaintiffs argued that outsiders who help the enterprise accomplish its illicit goals, “thereby evidencing their agreement to advance the cause, are fully liable” under the RICO statutes. But Judge Burroughs held that the plaintiffs hadn’t adequately shown how providing ordinary banking services to marijuana-related businesses, in compliance with Treasury Department guidance aimed at enabling banks to provide such services, sufficiently demonstrated it joined and intended to further a RICO conspiracy.

    The judge found that the plaintiffs’ complaint contained little to no allegations that connect any of the other defendants to the alleged enterprise or conspiracy.

    The government defendants' motions to dismiss were granted. The remaining motions to dismiss were denied, but the plaintiffs were allowed the opportunity to amend their complaint as far as the other defendants.

    Implication of case

    While the ultimate outcome of this case remains to be seen (assuming the plaintiff’s amend their complaint regarding other defendants), the primary implication of this case is that cannabis-related banking organizations are able to provide basic banking services to cannabis industry businesses without the threat of RICO liability hanging over their heads. Thus, while a multitude of risks to those in the marijuana-related banking industry still persist, this is at least one positive development for those organizations, and ultimately cannabis-related commercial activity in Massachusetts as well.

    -- Jason Carr

    October 30, 2018 in Banking, Business, Commercial Law | Permalink | Comments (0)

    OPINION: State-legalized marijuana businesses probably need not fear federal prosecution, but that "probably" should be more clear

    Legalpic

    States with legal marijuana cannot have complete confidence in the legitimacy of their businesses because marijuana remains federally illegal. Cannabis in the U.S. is a Schedule 1 drug, which has a very specific meaning according to the DEA website

    Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Some examples of Schedule I drugs are:

    heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote

    Cannabis is explicitly illegal on the federal level to this day, despite state efforts to legalize marijuana locally. Adding further confusion to the mix, Attorney General Jeff Sessions has not made it clear whether legal marijuana business owners will be prosecuted. 

    Dispensaries can take small solace in the apparent lack of Congressional or presidential support for Sessions. In a Wall Street Journal article, authors Sadie Gurman and Natalie Andrews noted that Sessions did not seem to have the backing of the president or Congress behind his desires to crack down on states with legal marijuana: 

    Attorney General Jeff Sessions vowed to use federal law to get tough on marijuana, announcing in January he was ending Obama-era protections for the nascent pot industry in states where it is legal. Six months into his mission, he is largely going it alone.

    Mr. Sessions’ own prosecutors have yet to bring federal charges against pot businesses that are abiding by state law. And fellow Republicans in Congress, with support from President Donald Trump, are promoting several bills that would protect or even expand the legal pot trade.

    The article went on to explain that Sessions told members of Congress that the Justice Department is now emphasizing the pursuit of more dangerous drugs.

    And well they should -- by many measures, cannabis is a far less dangerous drug than even legal alternatives like alcohol and tobacco. Smoking tobacco has been linked to lung cancer, and drinking too much alcohol can cause alcohol poisoning and even death.

    Yet it is functionally impossible to overdose on the psychoactive ingredient in marijuana, THC, and medicines with CBD oil have been successfully used to treat patients suffering from seizures. Perhaps due to the fact that alcohol and tobacco have been accepted and abundant for so long, they remain legal and well regulated, as opposed to cannabis. 

    Although unlikely, at any point, federal agents could bring suit against a state's legal marijuana businesses and arrest the people running it. This should not be the case because it leaves marijuana businesses in an uncertain place. If federal agents are not going to enforce federal marijuana law, perhaps the law should at least be altered, or abolished. 

    Keeping marijuana illegal does not benefit society overall. It results in unnecessary prison sentences for nonviolent offenders charged merely with small scale possession. It inhibits research into medical applications.

    Some argue that legal marijuana might lead to lower productivity and differences in brain development for young children, but such detriments are far outweighed by other factors at play. Those factors include huge potential for tax revenue generation; potential medical treatments for nausea, loss of appetite, seizures, and pain medication; and focusing of resources toward other larger problems like the opioid epidemic.

    Marijuana legalization is an incredibly complex process, in which countless factors are at play and there is no simple solution for everyone. Things would be much simpler, though, if the federal government stepped up in favor of legalization, whether for medical or recreational marijuana. Even if the government actually did start cracking down on legal marijuana businesses, that might be preferable to this Sword of Damocles hanging over the head of every pot business owner, held up by just a single thread. 

     -- Alex Bennett

    October 30, 2018 in Decriminalization, Drug Policy, Federal Regulation, Legislation, Local Regulation, State Regulation, Voter Initiatives | Permalink | Comments (1)

    Israeli Study Shows Cannabis Oil Improves Crohn's Disease Symptoms

    AaaA recent study out of Israel provides evidence that cannnabis oil significantly improves symptoms of Crohn's disease. Crohn's disease is a chronic inflammatory bowel disease that causes inflammation of the digestive tract. Common symptoms associated with Crohn's disease include: diarrhea, fever, fatigue, abdominal pain and cramping, blood in the stool, mouth sores, and reduced appetite and weight loss.

    Researchers from Israel recruited 46 people with moderately severe Crohn's disease, and randomized the participants to receive 8 weeks of treatment with either a cannabis oil containing 15% cannabidiol and 4% tetrahydrocannabinol or a placebo. Severity of symptoms and quality of life were measured before, during, and after treatment.

    The results show that the group receiving the cannabis oil had significant reduction in their Crohn's disease symptoms compared with the placebo group, with 65% of the cannabis oil group meeting criteria for clinical remission. The cannabis oil group also had significant improvements in their quality of life when compared to the placebo group. 

    Interestingly, the study's authors say it seems to disprove the idea that the improvement of Crohn's disease symptoms is a result of reduction of inflammation in the digestive tract: 

    Speaking at UEG Week 2018 in Vienna, lead researcher, Dr. Timna Naftali explained, "Cannabis has been used for centuries to treat a wide range of medical conditions, and studies have shown that many people with Crohn's disease use cannabis regularly to relieve their symptoms. It has always been thought that this improvement was related to a reduction in inflammation in the gut and the aim of this study was to investigate this."

    "We have previously demonstrated that cannabis can produce measurable improvements in Crohn's disease symptoms but, to our surprise, we saw no statistically significant improvements in endoscopic scores or in the inflammatory markers we measured in the cannabis oil group compared with the placebo group," said Dr. Naftali. "We know that cannabinoids can have profound anti-inflammatory effects but this study indicates that the improvement in symptoms may not be related to these anti-inflammatory properties."

    Going forward, the research group plans to further study the potential anti-inflammatory properties of cannabis in the treatment of Crohn's disease and other inflammatory bowel diseases:

    "There are very good grounds to believe that the endocannabinoid system is a potential therapeutic target in Crohn's disease and other gastrointestinal diseases," said Dr. Naftali. "For now, however, we can only consider medicinal cannabis as an alternative or additional intervention that provides temporary symptom relief for some people with Crohn's disease."

    --Taylor Allen

     

    October 30, 2018 in Medical Marijuana, News, Research | Permalink | Comments (0)

    Sunday, October 21, 2018

    New Study Shows Identical Amounts of THC in Different Marijuana Strains

    A new study shows that many different strains of marijuana have the same tetrahydrocannabinol (THC) and cannabidiol (CBD) concentrations, despite their unique street names. The study, conducted by the University of British Columbia at Okanagan, raises questions about how marijuana is marketed Ubco-yellow-logoto consumers and how informed consumers actually are.

    The study, published in Nature’s Scientific Report, examined 33 strains from 5 licensed providers in Canada. The research shows that most strains, regardless of their origin or name, had the same amount of THC and CBD. However, the study found differences in a number of previously unknown cannabinoids in low quantities.

    "It is estimated that there are several hundred or perhaps thousands of strains of cannabis currently being cultivated," one of the study’s co-authors, Professor Susan Murch, who teaches chemistry at UBC Okanagan, told ScienMag Science Magazine. She continued, "we wanted to know how different they truly are, given the variety of unique and exotic names."

    This study comes at an important time with the legalization of marijuana in Canada and is especially important to consumers who want to be informed when deciding what marijuana strains to purchase. Elizabeth Mudge, co-author of the study and a doctoral student working with Professor Murch explained to ScienMag:

    A high abundance compound in a plant, such as THC or CBD, isn't necessarily responsible for the unique medicinal effects of certain strains. Understanding the presence of the low abundance cannabinoids could provide valuable information to the medical cannabis community.

    Although the study showed similar amounts of TCH and CBD in various marijuana strains, the different medicinal effects are still touted by producers and sellers. Currently licensed producers are only required to report THC and CBD values, however, Professor Murch believes her new research highlights that the important distinguishing chemicals in cannabis strains are not necessarily being analyzed and may not be fully identified, especially to consumers. 

     

    --Colin Heinrich

     

    October 21, 2018 | Permalink | Comments (0)

    ANALYSIS: Marijuana Revenue & Regulation Act ( S.776)

    AnalysisOn March 30, 2017, Senator Ron Wyden (D-Ore) introduced S.776, the Marijuana Revenue and Regulation Act.

    The bill’s official title is “A bill to amend the Internal Revenue Code of 1986 to provide for the taxation and regulation of marijuana products, and for other purposes.”  The legislation aims to remove marijuana from the list of controlled substances and set out requirements for the taxation and regulation of marijuana products.

    Specifically, the federal tax code would be amended to impose: (1) an excise tax on any marijuana product produced in or imported into the U.S.; and (2) an occupational tax on marijuana production facilities and export warehouses. The definition of “marijuana product” wouldn’t include industrial hemp or any item containing marijuana that’s been approved by the FDA for sale for therapeutic purposes and is marketed and sold solely for that purpose.

    Consequently, the Department of Justice would be required to remove marijuana from all schedules of controlled substances under the Controlled Substances Act (CSA).

    Pros

    The bill appears to have contemplated criticism of legalizing marijuana on a federal level. The legislation would require producers, importers, and exporters of marijuana products to comply with rigorous licensing, recordkeeping, packaging, labeling, and advertising requirements. This would mean there will be greater control over the production and use of marijuana. The bill would establish penalties for violations of marijuana laws, including the prohibition of the sale of more than one ounce of marijuana in any single retail transaction.

    Further, S.776 amends the CSA to require penalties for shipping or transporting marijuana into any state or jurisdiction where it’s illegal. Thus, states where cannabis is not legal will be protected from the substance crossing their borders. Currently, 39 states and the District of Columbia have laws legalizing marijuana (either medicinal or recreational), and the trend is towards greater acceptance of the substance.

    Roughly six-in-ten Americans (62%) believe the use of marijuana should be legalized—a steady increase over the past decade, according to a new Pew Research Center survey. This is twice the number that were in favor of legalization in 2000 (31%). And the majorities of younger Americans say the use of marijuana should be legal, including Millennials (74%), Gen Xers (63%), and Baby Boomers (54%). Given these numbers, in addition to the clinical data showing that it can help improve patient quality of life and its potential for revenue and jobs, the proposed legislation has backing among most working adults in the country.

    Cons

    While there are numerous compelling arguments for legalization and the passing of S.776, opponents say there’s also research demonstrating the dangers of marijuana use. A study by Northwestern Medicine and Massachusetts General Hospital/Harvard Medical School found that young adults who used marijuana only recreationally showed significant abnormalities in two key brain regions that are important in emotion and motivation.

    In addition, law enforcement claims that parameters don't exist for determining when someone is under the influence of marijuana. There’s no blood-alcohol content (BAC) test, which makes enforcement worrisome. Critics also point to the fact that THC, the psychoactive component of cannabis, can stay in the bloodstream for days or weeks. As such, getting an accurate reading of impairment, and determining when marijuana was used, would entail some guesswork.

    Potential Implications for the Cannabis Industry

    As mentioned above, passage of S.776 would have a positive economic impact for the cannabis industry. For example, researchers in Colorado found that their taxed and regulated cannabis industry contributed more than $58 million to the local economy. Opponents are quick to point out that there was about $23 million in added costs to legalization, such as law enforcement and social services. However, the researchers at Colorado State University-Pueblo found that the county still wound up with a net positive impact of more than $35 million. The university’s report examined trends in revenue, construction, marijuana use, homelessness, crime, environmental impact, and other topics and found little conclusive evidence to support claims that marijuana legalization has caused widespread social change in the county.

    Also, a national study in January found that legalizing marijuana across the country would create at least $132 billion in tax revenue and more than a million new jobs across the United States in the next decade. New Frontier Data, a data analytics firm that sponsored the study, said that the marijuana industry could create an “entirely new tax revenue stream for the government,” with millions of dollars in sales tax and payroll deductions.

    Takeaway

    The momentum certainly appears to be moving towards widespread legalization of marijuana at the federal level.

    Another bill, the Marijuana Data Collection Act, with bipartisan support. would direct the Department of Health and Human Services to partner with other federal and state government agencies to study "the effects of State legalized marijuana programs on the economy, public health, criminal justice and employment." If enacted, the National Academy of Sciences would conduct the research and publish its findings within 18-months.

    However, none of the several bills recently introduced in Congress, including S.776, are given more than a 3% chance of passage into law by Govtrack. Whether the push towards adoption of bills such as these once Congress reconvenes after the mid-term elections remains to be seen.

    --Jason Carr

    October 21, 2018 in Federal Regulation, Legislation, Politics | Permalink | Comments (2)

    ANALYSIS: Marijuana Justice Act (S. 1689, H.R. 4815)

    AnalysisSpearheaded by Senator Cory Booker (D-NJ) and California Rep. Barbara Lee, the Marijuana Justice Act is attempting to set the foundation, on a congressional level, for what equitable and progressive marijuana legalization should look like. 

    The Senate Bill, S. 1689, was introduced by New Jersey Senator Cory Booker on August 1, 2017, during the 1st Session of the 115th United States Congress. In January of this year, an identical bill was presented to the House of Representatives during the 2d Session, titled H.R. 4815, by California Representative Barbara Lee. Although the proposals have not yet garnered traction within Congress, the bills mark a progressive attitude towards legalization.

    Senate Bill 1689 and House Bill 4815, both named the "Marijuana Justice Act", are a pair of identical Congressional bills that center marijuana legalization around criminal justice reform, accountability, and community reinvestment, and they represent the first time that companion legislation has been introduced in both chambers of Congress to remove marijuana from the Controlled Substances Act (CSA).

    Objectives

    The Marijuana Justice Act, if enacted, would:

    • Remove marijuana from the US Controlled Substances Act, thereby ending the federal criminalization of cannabis;
    • Incentivize states to mitigate existing and ongoing racial disparities in state-level marijuana arrests by:
    1.  Cutting federal funding for state law enforcement and prison construction if a state disproportionately arrests and/or incarcerates low-income individuals and/or people of color for marijuana offenses and;
    2. Allowing entities to sue states that disproportionately arrest and/or incarcerate low-income individuals and/or people of color for marijuana offenses;
    • Provide a process for expungement of federal convictions specific to marijuana possession;
    • Allow individuals currently serving time in federal prison for marijuana-related violations the right to petition the court for resentencing;
    • Create a community reinvestment fund to invest in communities most impacted by the failed War on Drugs.

    The Text

    A Bill to amend the Controlled Substances Act to provide for a new rule regarding the application of the Act to marihuana, and for other purposes.

    The stated purpose of the Act is to de-schedule marijuana, apportion funds, and create a “Community Reinvestment Fund”.

    Section 1. Short Title

    Both bills began with their titles, with the Senate bill stating: This Act may be cited as the “Marijuana Justice Act of 2017”. The House bill has identical language, with the only amendment being the change of the date from 2017 to 2018 when the House bill was introduced.  

    Section 2. De-Scheduling Marihuana

    This section serves as the cornerstone for the legalization aspect of the Act.

    For context, the Controlled Substances Act is the federal drug policy that places all regulated substances into one of five schedules based on the potential for abuse, current accepted medical use, and degree of physical or psychological dependence resulting from abuse of the drug. 

    As quoted in the CSA, the finding for Schedule I drugs include that:

    (A) The drug or other substance has a high potential for abuse.

    (B) The drug or other substance has no currently accepted medical use in treatment in the United States.

    (C) There is a lack of accepted safety for use of the drug or other substance under medical supervision.

    Section 2 (a) of the Marijuana Justice Act is titled "Marijuana Removed from Schedule of Controlled Substances." The purpose of this section is to de-schedule marijuana from the Controlled Substances Act (CSA) by striking the terms "marihuana" and "tetrahydrocannabinols", and re-designating subparagraphs within §202(c) of the Controlled Substances Act (21 U.S.C. 812). 21 U.S.C. 812 (c) (10) and 21 U.S.C. 812 (c) (17) force cannabis-related substances "marihuana" and "tetrahydrocannabinols," respectively, into schedule 1 regulated substances; therefore, by striking the terms as mentioned above, they would no longer be listed as schedule 1 substances under federal law.

    Section 2 (b) of the Act, captioned “Removal of Prohibition on Import and Export”—§1010 (b) of the Controlled Substances Import and Export Act (21 U.S.C 960) strikes the language that penalizes:

    Any person who -

    • (1) …  knowingly or intentionally imports or exports a controlled substance,
    • (2) …  knowingly or intentionally brings or possesses on board a vessel, aircraft, or vehicle a controlled substance, or
    • (3) …  manufactures, possesses with intent to distribute, or distributes … a mixture or substance containing a detectable amount of marihuana. 

    Additionally, the Act would conform the following amendments to the Controlled Substances Act by striking variations of the term "marihuana" and restructuring the designations of paragraphs and subparagraphs within:

    21 U.S.C. 802 (44) – Definitions

    21 U.S.C. 841 (b) – Prohibited Acts, penalties

    21 U.S.C. 842 (c) (2) (B) – Prohibited Acts, penalties with prior convictions

    21 U.S.C. 843 (d) (1) – Prohibited Acts, penalties and terms of imprisonment

    21 U.S.C. 859 (a) – Distribution to persons under age twenty-one, first offense

    21 U.S.C. 860 (a) – Distribution or manufacturing in or near schools and colleges, penalties

    21 U.S.C. 863 (d) – “Drug Paraphernalia” defined

    21 U.S.C. 886 (d) – Payments and advances, Drug Pollution Fund

    The last measure of de-scheduling marijuana would amend the National Forest System Drug Control Act of 1986 by striking the terms "marijuana and other" and "marihuana" from the act.

    Section 3. Ineligibility for Certain Funds

    Although this section is titled, “Ineligibility for Certain Funds” the section also provides guidelines for expungement and sentencing review.

    Section 3 (a) provides definitions for terms such as “covered state,” “disproportionate arrest rate,” “low-income individual,” and several other terms cited throughout the section.

    Section 3 (b) details the considerations for distributing Federal funding to states. Under the Act, if a state is determined to have a disproportionate arrest or incarceration rate for marijuana offenses, they will be deemed ineligible to receive federal funds to staff or construct a prison or jail. However, covered states will not be subject to more than a 10% reduction of funds that would otherwise go to law enforcement assistance programs, block grants, and justice assistance grant programs. Additionally, any funds not awarded to covered states will be deposited into the Community Reinvestment Fund.

    Section 3 (c) requires that each Federal court issue an expunction for marijuana use or possession offenses that resulted in a conviction. Subsection (d) provides for sentencing review and states that individuals who have been sentenced and imprisoned have the right to motion the court to conduct a sentencing hearing. Lastly, subsection (e) allows individuals who have been aggrieved by the disproportionate arrest or incarcerations rate the right to bring a civil action in appropriate district courts.

    Section 4. Community Reinvestment Fund

    The final section of the Marijuana Justice Act establishes a "Community Reinvestment Fund" within the United States Treasury. According to the bill, deposits to the Fund will consist of funds not awarded to covered states, states that have not enacted a statute legalizing marijuana, because they have disproportionate arrest and/or incarceration rates for marijuana offenses in addition to amounts otherwise appropriated to the Fund.

    Section 4 (c) outlines the uses for the funds; making them available to the Secretary of Housing and Urban Development to reinvest in communities most affected by the war on drugs by funding job training, re-entry services, community centers, and other programs and opportunities. The Act concludes by authorizing $500,000,000 to be appropriated to the Fund for each fiscal year from 2018 – 2040.

    Implications

    The Marijuana Justice Act is rooted in social justice and community development. While the objectives of the Act are noble and progressive, perhaps the Act is attempting to tackle too many issues at once. There has been vocalized support for federal legalization, making Section 2 of the Act the most accessible.

    Additionally, expunction efforts for marijuana-related crimes have been a topic of discussion on both the West and East coasts. However, there is a likelihood that courts will get overloaded by individuals who desire to bring civil suits. In regards to the Community Reinvestment Fund, the introduction of the fund would be groundbreaking; however, it is important to realistically consider the logistics and operations of the fund, as there would need to be continuous data-collections and attention to the appropriations on a federal level. If the Act were to be passed in its entirety, it would be a victory for communities impacted by the war on drugs and individuals who have been negatively affected by the implicitly discriminatory enforcement of current marijuana laws. 

    --Gianna Redeemer

    October 21, 2018 in Decriminalization, Drug Policy, Federal Regulation, Law Enforcement, Legislation, Politics, State Regulation | Permalink | Comments (0)

    BOWLIN: Medical Marijuana May Help Those with Multiple Sclerosis

    In an article in Medical Xpress, HealthDay News reporter Dennis Thompson discusses the possible benefits of using medical marijuana to quell multiple sclerosis symptoms.

    Medical-cannabis-patients-guns-1280x800

    The impetus for the article was a major new evidence review of cannabis-derived drugs. The review combined seventeen clinical trials involving 3,161 patients. Based on patient self-assessments, researchers found that cannabis-derived drugs were associated with a mild reduction in muscle contractions, bladder dysfunction, and pain.    

    Multiple sclerosis, a progressive and degenerative disease in which the immune system attacks nerves, produces a variety of symptoms, including muscle contractions. Thus, trial researchers concluded that cannabis-derived drugs could have "limited effectiveness in treating multiple sclerosis symptoms."

    "The clinical trials also showed that cannabis-derived drugs come with few side effects, [but] no serious ones," noted Dr. Marissa Slaven, an assistant professor of palliative care at McMaster University in Hamilton, Ontario, Canada. Side effects included dizziness, dry mouth, fatigue, intoxication, impaired balance, memory problems and sleepiness.

    However, patients' self-reports differed from the results of objective tests used by doctors in the trials. Doctors could not find any objective evidence to confirm self-reports that medical marijuana soothed symptoms typical of multiple sclerosis. This is troubling according to Nicholas LaRocca, vice president of healthcare delivery and policy research at the National Multiple Sclerosis Society, "There's really relatively little data that's strong. I think that discourages practitioners from feeling comfortable about recommending this . . . ." 

    Thus, while the results from the new evidence review are unclear, "the upshot . . . is that more research is needed to nail down medical marijuana's ability to help those with multiple sclerosis." Unfortunately, Thompson notes that research on medial marijuana has been stymied in the United States due to federal restrictions. 

    --Emily Bowlin

     

    October 21, 2018 | Permalink | Comments (2)

    OPINION: Medical Benefits vs. Economic Gain for Legalizing Cannabis.

    AaaThere are typically two camps that exist when people argue for legalization. You have those who would want to set up a store and begin selling cannabis like the cash crop that it is, and those who couldn't care less what the strain is called as long as it stops their seizures, anxiety, opioid addiction, or whatever illness they have that is being treated by medical marijuana.

    Does it matter what camp you're in? Is one more persuasive than the other? Medical marijuana seems to be the stronger camp when it comes to the act of actual legislation and implementation. That doesn't mean legislators aren't thinking about the profits, but it is easier to argue economics once you have a template thanks to medical marijuana. 

    Medical marijuana began its path to legalization in the 1990's when five states, Washington, Oregon, California, Alaska, and Maine put into place their own versions of laws that legalized the use of marijuana for medical purposes. Since then, medical marijuana has appeared to be the baby step before recreational legalization. It wasn't until 2012 that recreational marijuana became legal, and even then it was only Colorado and Washington. 

    Now, in 2018, we have 9 states and the District of Columbia with fully legal recreational marijuana and we seem to be on the path of increasing that number, but how? 

    One obvious argument for recreational legalization is the economic boom that comes with it. Colorado boasts a $506 million dollar profit from sales since recreational stores opened in 2014, according to CNN. In this current economic climate, that number should surely convince the public that marijuana is an incredibly profitable market and states should be running to legalize it. But why aren't they? 

    Fear. Marijuana is still a drug and drugs can be scary. Drugs lead to addiction, addiction leads to a downward spiral, and nobody wants their family or friends to go down that path. This argument comes in the form of driving while high. a recent Gallup pole shows that about 47% of the participants believe that driving will be less safe if there is legal marijuana. There hasn't been a scientifically proven way to determine if the driver themselves is high. We can test if there is THC present in the body but how long has it been there, is it enough to intoxicate this specific driver, and many more questions come in to play when assessing impaired driving.

    Law enforcement in states with legalization have been trying to find a system that works together to maintain safety without assuming guilt. Certain states, like Colorado have implemented a legal limit of THC allowed to be present in the driver's system. Their officers have received special training, according to the state's website, that allow them to detect if a person is impaired due to drug use. This limit applies to MMJ and recreational users. The Washington Post compared two studies on the increase of auto accidents in states with legalization. The first was by the Insurance Institute for Highway Safety, the second by The American Journal of Public Health. The American Journal found no increase in fatal car crashed but the Highway Safety found a 3% increase in auto accidents. 

    This is the part where people against legalization say that public safety and wellbeing is more important than money and the argument gets shut down. There is one thing that the states with recreational marijuana all have in common; they all had medical marijuana legalized before legalizing recreational use. This is how the state can test the waters for marijuana, the public reaction, the drawbacks, what the overhead costs really are, different methods that could be used in terms of patients picking up the marijuana. And when the fear of impaired driving comes out then advocates bring out a study done by the American Journal of Public Health that claimed there was a decrease in traffic fatality rates. 

    Another issue that comes up when advocating to jump right into recreational use is defining the terms. Legislation is not easy to write or pass, it can be less difficult when the governing body can at least agree on definitions and terms of use, sale, and consumption. When advocates try to begin with recreational, the first issue will probably be, how can we keep this out of the hands of children. This is a very important issue, one that alcohol businesses are well aware of. The trick is that their product, while dangerous, is not on the Controlled Substances Act.  Legislators go down a never ending path when trying to legalize recreational marijuana because their audience for the bill is too large. When there is a medical marijuana bill, the same terms need to be defined, but the size of affected users is not nearly as large. This allows for the creation of what could be the template for recreational marijuana. 

    With what seems to be a movement towards legalization of marijuana across the United States, the best options for states that have not created medical marijuana laws, to do so before attempting to legalize recreational marijuana. It can placate certain fears of the general public, give the legislators a template, and it opens doors to those who really need it sooner rather than later. 

    --Loren D. Elkins

    October 21, 2018 in Drug Policy, Federal Regulation, Legislation, Local Regulation, Medical Marijuana, Recreational Marijuana, State Regulation, Taxation, Voter Initiatives | Permalink | Comments (0)

    Saturday, October 20, 2018

    Canopy Growth CEO predicts legal banking for cannabis companies by Christmas

    Weed-bank

    Weed businesses may soon be able to bank legally in the United States, according to the prediction of the CEO of Canopy Growth, Bruce Linton.

    This would mean cannabis business owners would no longer have to rely on cash-only business models or cryptocurrencies like Bitcoin, and would be able to get loans far more conveniently. 

    The prediction apparently came from a conference for cannabis businesses, according to the Forbes article by contributor Sara Brittany Somerset.

    Somerset explained in the article that Linton's prediction was due to a sequence of events indicating that established structures may support legal cannabis banking. 

    Linton expressed confidence that since his cannabis company infiltrated the New York Stock Exchange –although they were not allowed to ring or even touch the opening bell– that banking will naturally follow suit.

    Linton elucidates that being listed on the exchange validates the company's adherence to anti-money laundering rules, which in turn meant that about a month ago, Bank of America could lend Constellation Brands Inc. -the company behind Corona beer -about CAD five million to give to him. Canopy Growth's game-changing deal with the producers of Corona has more than doubled the pot producer's stock price. Linton, however, attributes Canopy's sky-high valuation to the global medical marijuana market. 

    Either way, Linton is confident that this sequence of events provides enough "momentum and weight to cause the banking conundrum to be resolved soon."

    The CEO also used the conference to talk about a "port-a-potty theory" involving the impacts of locally sourced resources, according to Somerset's article. 

    Linton admits he is "nuts about" his port-a-potty theory, and views it as the cornerstone of local economic stimulation. He insists it creates a snowball effect. "We have almost two thousand employees and they all know what the rules are about renting port-a-potties locally," he insists.

    His theory is if he wants to hire Ph.D.s in a local town, he has to purchase port-a-potties for his construction sites locally, so that the port-a-potty vendor will take his new-found extra income and go out for dinner more often, which will, in turn, create better restaurants, then the local car dealerships will improve. Next, the houses will transition, so that when his Ph.D. hires begin to work there, they won't say, “God, what an awful town."

    The article's writer seemed unimpressed with other aspects of Linton's speech, such as a "white-washed, non-diversified video commercial for Canopy Growth" and the reaction to his "gentrification ideals" being "stunned, stony silence from the audience and incredulous side-eye from the few Jamaicans in attendance." 

    As for Linton's prediction of legal banking by Christmas, only time will tell whether it proves accurate. 

    -- Alex Bennett

    October 20, 2018 in Banking, Business, Finance, News, Stocks | Permalink | Comments (1)

    Weed Is Legal in Canada, But Is There Enough of It?

    The move to legalize cannabis in Canada comes into effect on October 17th, but it is estimated that suppliers will not have enough weed to meet demand.

    While a recent survey conducted by Statistics Canada shows that the number of Canadian cannabis users is not expected to rise significantly, Statistics Canada's National Cannabis Survey, 3rd quarter 2018, reveals that some 4.6 million Canadians or 15% of the population has used cannabis just in the past 3 months. 

    Montana-marijuana-CannabisNow-620x400

    According to MetroUK: Researchers from the University of Waterloo and the C.D. Howe Institute say suppliers will only be able to fulfill between 30-60% of demand. According to them, the legal cannabis supply is expected to be around 210 tonnes while total demand in the country will be about 610 tonnes.

    One of the main reasons for the lack of cannabis is that the Canadian government seems to be dragging its feet in granting licenses to suppliers. This could cause quite a loss, as MetroUK reports: "[This] means the government will be losing out on an estimated $774,000,000 (£454,000,000) in tax revenues."

     

    --Taylor Allan

     

     

     

    October 20, 2018 in Business, Finance, International Regulation, News, Taxation | Permalink | Comments (0)